THE DEFINITIVE GUIDE TO

INVESTING IN BALI
IN 2024
The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

TABLE OF CONTENT
Introduction 04
Brief overview of Bali as an investment destination 05
Importance of understanding the local real estate 05

“ Hello and welcome to the world of real estate investment in Bali. market
In this e-book, we embark on a journey through the vibrant Chapter 1: 06
Understanding the Bali Real Estate Market
landscape of Bali’s property market, delving into its unique charm,
potential rewards, and essential insights for investors seeking to
Chapter 2: 10
capitalize on this exotic paradise.”
Exploring Bali’s Real Estate Sub-markets

Chapter 3: 43
Investment Opportunities in Bali

Chapter 4: 54
Legal and Regulatory Considerations for Foreign Investors

Chapter 5: 67
Local Insights for Successful Investment

Chapter 6: 72
Case Studies

Chapter 7: 79
Getting Started with Your Investment in Bali Conclusion

Additional Resources 94
Contact Information 95

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

BRIEF OVERVIEW OF BALI AS

INTRODUCTION AN INVESTMENT DESTINATION
Nestled in the heart of the Indonesian archipelago, Bali has captivated travelers
and investors alike with its breathtaking landscapes, rich culture, and warm hospitality.
Renowned for its pristine beaches, lush rice terraces, and spiritual aura, Bali offers a
lifestyle that harmonizes relaxation with adventure, making it a magnet for visitors from
Whatever your profile, this guide is
designed to help you find the information around the globe. In recent decades, Bali has emerged as one of the world’s most popular

you’re looking for about property tourist destinations.

investment in Bali. If you’ve downloaded The figures for tourism in Bali testify to remarkable growth. In 2010, the island

this guide, you’ve already done part of welcomed approximately 2.5 million international visitors. Since then, the number of
the job and that shows your interest in tourists has increased exponentially, reaching a peak of 6.3 million in 2019, according to
property in Bali, whether to buy or invest. statistics from the Indonesian Ministry of Tourism.
In 2023, Bali made an remarkable recovery after 2 years of pandemic - it reopened
Tipi Estate was founded by a real on April 2022 to foreign travelers, with 5,273,258 tourists, making the Island of Gods one
estate expert and developer with a deep of the world’s most visited destinations for tourists.
understanding of Bali’s property market.
Our core mission is to provide each
client with a personalized and valuable
experience, helping them reach their
property goals with confidence. We aim
to become the go-to real estate agency in
IMPORTANCE OF
Bali for both investors and expatriates.
UNDERSTANDING THE LOCAL
With a focus on key regions
such as Ubud, upper Canggu, and Nusa
REAL ESTATE MARKET
Penida, Tipi Estate offers comprehensive
As with any investment endeavor, success in Bali’s real estate market hinges on
services from property selection and due
a deep understanding of its dynamics, nuances, and intricacies. By gaining insight into
diligence to post-purchase support. Our
the local market, investors can identify emerging opportunities, mitigate risks, and make
commitment to expertise and impeccable
informed decisions that align with their investment objectives.
customer relationships ensures that your
journey with us is smooth and successful. Whether you’re a seasoned investor or a newcomer to the world of real estate,
equipping yourself with knowledge about Bali’s unique market conditions is paramount
to unlocking its full potential and maximizing your investment returns.
Don’t worry, all the information on the Bali real estate market will be explained in
much greater detail in the following pages.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

01
CHAPTER

UNDERSTANDING OVERVIEW OF BALI’S

THE BALI REAL REAL ESTATE MARKET
ESTATE MARKET
With 5.27 million international tourists and 10 million domestic tourists, Bali
has been ranked as the 3rd most popular destination in the world in 2023 by the
World Tourism Organization.

For 2024, growth prospects for Bali real estate are promising, thanks in
particular to the boom in high-end tourism with strong purchasing power.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

2024: AN EVOLVING MARKET

In Bali and Indonesia in general, in 2028, with an average annual growth
property values and yields are expected rate of 5.82%.
to remain attractive for 2024 and In Bali, rental costs are expected to
beyond. According to analysts at Mordor rise by an average of 15% to 20% a year, and
Intelligence, the Indonesian real estate the average occupancy rate of properties
market is set to grow from USD 61.22 is expected to be between 65% and 80%.
billion in 2023 to USD 81.24 billion

BENEFITS OF INVESTING IN BALI

Firstly, Bali has a stable real estate market with good yields, and here is what we Also, the benefits of investing in real estate
have witnessed over the past few years : in Bali include a fairly low investment threshold:
apartments from $90,000, cottages with land
1. Real estate in Bali has one of the highest yields in the world. On average, 15% per from $150,000. A fully finished 3-bedroom villa in a
year - for Leasehold, without taking into account the rising cost of housing. By way of tourist location can be purchased for $350,000.

comparison, the average property yield worldwide is 5%.

The cost of land and real estate in Bali is
2. The cost of rent on the island is rising by an average of 15-20% a year, although it is
generally more affordable than in the other paradise
expected to slow down in the coming years. islands of the world.

3. Average occupancy of real estate during the year is 65-80%.

In addition, the country’s government
4. Purchased properties can be repaid in 5 to 8 years.
promotes the attraction of foreign investment
by simplifying the conditions, tax system and
legislation for foreign investors.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

02
CHAPTER

EXPLORING INTRODUCTION TO BALI’S

BALI’S REAL ESTATE GEOGRAPHICAL DIVERSITY AND
ITS IMPACT ON REAL ESTATE
SUB-MARKETS
Bali is renowned for its geographical diversity, which has a significant impact on
the local real estate market. This tropical island offers an impressive range of landscapes,
from white sandy beaches to rolling green hills, rice terraces and majestic volcanoes.
This diversity creates a multitude of environments and lifestyles for residents and
visitors alike, which directly influences the island’s real estate sector.
Choosing the right location for your villa is crucial, as it will offer you years of
amazing returns. The wrong location could result in lower-than-expected results.
Thankfully Bali offers a diverse range of regions, each with its own unique appeal:

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Ubud stands as a historical and spiritual haven. Tucked inland amid rice fields and
forests, Ubud has long been Bali’s cultural center, known for traditional arts, crafts, and

UBUD spirituality. What sets Ubud apart is its immersive experiences, ranging from traditional
Balinese dance performances to hands-on art workshops.

Over the years, Ubud has become a global destination for wellness retreats, yoga
centers, and holistic healing, drawing a steady stream of visitors seeking peace and
rejuvenation. Despite the growth in nearby areas like Tegallalang, Ubud remains steadfast
in preserving its historical and natural heritage, making it a unique and timeless market.

Market Trends:
While Ubud has maintained its traditional charm, there has been a significant
uptick in eco-conscious developments such as eco-resorts and sustainable villa projects.
Investors are increasingly drawn to Ubud for its lower land prices compared to Bali’s
coastal markets, offering opportunities to develop boutique resorts and villas that cater
to the wellness and eco-tourism markets. Google Trends reveals that Ubud remains the
most-searched destination within Bali, highlighting its enduring appeal.

Challenges:
Despite the opportunities, there are challenges. Infrastructure in Ubud, while
improving, still lags behind other developed areas of Bali. The focus on preserving the
environment and culture may also limit large-scale developments, requiring investors to
balance growth with sustainability.

Investment Tip:
At Tipi Estate, we recommend focusing on sustainable, eco-friendly villas and
resorts that align with Ubud’s wellness-centric market. Boutique developments that offer
high-end amenities tailored to health-conscious tourists tend to perform exceptionally
well. Land prices remain favorable, with the leasehold price for an are (100 sqm) of land in
Ubud typically ranging from 4 to 8 million IDR per year, offering excellent value for long-
term investments.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Canggu has quickly transformed into a bustling hotspot, known for its laid-
back vibe, surf culture, and thriving expatriate community. What began as a surfer’s

CANGGU paradise has evolved into one of Bali’s trendiest areas, attracting digital nomads, young
entrepreneurs, and tourists who are drawn to its modern cafes, co-working spaces, and
boutique accommodations.

While traffic congestion has become an issue due to rapid development, Canggu’s
real estate market has delivered some of the highest returns on investment in Bali over
the last few years. Expansion continues westward, with areas like Pererenan, Seseh, and
Cemagi gaining traction.

Market Trends:
Property prices in Canggu have surged in recent years due to high demand from
expatriates and tourists seeking the ultimate coastal lifestyle. The villa market has seen
particularly strong growth, with properties appreciating rapidly. However, in 2024,
Canggu’s market reached its peak, with signs of a slowdown as oversupply and limited
available land have begun to curtail growth.

Challenges:
As Canggu becomes more saturated, the scarcity of empty plots and an oversupply
of villas are leading investors to seek opportunities in emerging markets further west.
Traffic congestion and infrastructure limitations are additional factors that may impact
long-term investment potential.

Investment Tip:
While Canggu’s market may have hit its peak, opportunities still exist for investors
who find well-priced properties or who are willing to renovate existing villas to meet the
high expectations of modern travelers.
At Tipi Estate, we recommend exploring neighboring areas such as Pererenan,
Seseh, Nyanyi, and Kedungu, where development is just starting and prices are still
favorable. For land in Canggu, leasehold prices typically range from 20 to 30 million IDR
per are (100 sqm) per year.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Seminyak has long been synonymous with Bali’s luxury and glamour. As one of
Bali’s most popular tourist destinations, Seminyak offers a sophisticated blend of high-
SEMINYAK end villas, luxury resorts, boutique shopping, and vibrant nightlife.

It attracts an upmarket crowd of visitors who come for its world-class restaurants,
trendy bars, and exclusive beach clubs. For investors, Seminyak has been a reliable
market, offering consistent returns thanks to its well-established tourism infrastructure
and constant stream of visitors.

Market Trends:
Over the years, Seminyak has seen extensive development, with most of the prime
land now occupied by resorts and private villas. As a result, investment opportunities in
Seminyak have become increasingly scarce, and property prices have soared. Investors
looking for high short-term returns may still find opportunities in the existing property
market, particularly in luxury villa rentals. However, new developments are becoming rare
due to the limited availability of land.

Challenges:
Seminyak’s appeal comes at a cost—literally. The area’s high property prices and
limited space for new development mean that long-term potential may be somewhat
capped. Additionally, competition from newer, more dynamic areas like Pererenan and
Uluwatu may begin to draw some of the tourist traffic away from Seminyak over time.

Investment Tip:
Seminyak remains a safe and attractive investment for those seeking luxury
properties with steady short-term returns. However, for those seeking long-term growth
potential, newer markets may offer more upside. At Tipi Estate, we advise our clients
to focus on premium properties that offer something truly unique, such as beachfront
locations or historically significant villas. While land in Seminyak is scarce and expensive,
well-located properties continue to perform well, attracting an affluent international
clientele.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Kuta is one of Bali’s most famous and long-established tourist destinations,

KUTA known for its bustling beachfront, vibrant nightlife, and affordable accommodations.
Popular with surfers and budget-conscious travelers, Kuta offers a lively atmosphere
filled with beach bars, nightclubs, and an eclectic mix of shops and markets. Despite its
reputation as a hub for budget tourism, Kuta’s location near Ngurah Rai International
Airport ensures a steady flow of visitors, making it a consistent performer in Bali’s real
estate market.

Market Trends:
Kuta’s real estate market has matured, with much of its beachfront already
developed. The area continues to attract a steady flow of tourists, particularly from
Australia and Southeast Asia. Despite Kuta’s focus on affordable tourism, land prices
remain relatively high due to limited availability, though still lower than more trendy
areas like Canggu or Seminyak.
The post-pandemic period has also created a unique opportunity for investors, as
many hotels and properties were abandoned during COVID, making Kuta a prime location
for renovation and revitalization projects.

Challenges:
Kuta’s reputation as a budget destination can limit its appeal for high-end investors.
The market remains primarily geared towards affordable accommodations like budget
hotels, guesthouses, and smaller villas. Additionally, Kuta’s rapid commercialization and
busy atmosphere may not suit tourists looking for quieter, more luxurious experiences.
Investors interested in upscale opportunities may find better potential in nearby Uluwatu,
which offers a more exclusive and high-end market.

Investment Tip:
Kuta remains a solid choice for investors targeting the mid-range and budget
tourist markets. Renovation opportunities are particularly appealing now, as many
properties have been left vacant since the pandemic, allowing savvy investors to acquire
and revitalize these spaces at competitive prices.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

At Tipi Estate, we recommend focusing on projects aimed at Kuta’s core audience,

such as affordable accommodations or commercial developments that cater to the steady
stream of budget travelers. Land prices in Kuta are still high, typically ranging between
15 and 25 million IDR per are (100 sqm) per year, but they remain lower than areas like
Canggu or Seminyak. SANUR
Future Outlook:
Kuta is set to benefit from the construction of a new railway connecting Ngurah
Rai International Airport to the town, which may rekindle interest in Kuta’s real estate
market. This development could make Kuta even more accessible and revitalize its appeal
to tourists. Investors who act now, particularly in renovation projects, may benefit from
this renewed interest.
However, for those seeking upscale investments, the more exclusive Uluwatu area
on the other side of the airport presents stronger opportunities for luxury developments.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Sanur offers a more tranquil and laid-back atmosphere compared to Bali’s

bustling tourist hubs. Located on the southeastern coast, Sanur is known for its calm
beaches, relaxed pace, and family-friendly environment.
It has long been favored by retirees, families, and expatriates who seek a quieter life
while still enjoying the beauty of Bali. Sanur’s charm lies in its combination of traditional
Balinese culture and modern conveniences, making it a unique alternative to the busier Investment Tip:
areas of the island. For investors with a long-term outlook, Sanur
presents excellent opportunities, especially in boutique
villa developments or beachfront properties.
With the growing appeal of Sanur’s new malls,
beach clubs, and its proximity to Bali’s medical tourism
facilities, it is becoming an increasingly attractive
Market Trends:
market for retirees, families, and wellness-focused
Sanur’s real estate market has seen consistent demand, primarily driven by
travelers.
expatriates, retirees, and long-term residents. While it traditionally catered to a more
Land prices range from 12 to 30 million IDR per are
reserved audience, Sanur is experiencing a resurgence due to new developments that aim
(100 sqm) per year for leasehold, making it a relatively
to modernize the area while maintaining its relaxed vibe.
affordable investment destination with stable returns.
The recent opening of ICON Mall, a beachfront shopping center, and the construction
of new beach clubs are transforming Sanur into a more attractive option for both tourists
Future Outlook:
and investors. Additionally, large-scale developments of beachfront apartment and villa
Sanur’s evolution is driven by new developments,
complexes are emerging, reflecting Sanur’s growing appeal as an investment destination.
including the ICON Mall and several new beach clubs
Although prices are still lower than in trendier areas like Seminyak or Canggu, this is
along its coast, adding vibrancy to the area. The recent
gradually changing.
arrival of large-scale apartment and villa complexes on
the beachfront signals a new phase in Sanur’s real estate
Challenges:
market.
While Sanur is evolving, it still largely appeals to families, retirees, and wellness
The completion of the toll road connecting Sanur
seekers, which may not align with investors targeting high-energy, fast-paced tourism.
to other key areas of Bali has improved accessibility,
However, the rise of new large-scale developments shows that the area is not entirely
and the continued growth of nearby medical tourism
limited to small projects.
facilities adds further value to Sanur’s long-term
Investors should be aware that while the beachfront is seeing some large-scale
potential.
apartment and villa complexes, the pace of growth may be slower compared to Bali’s more
Investors who enter the market now may benefit
dynamic hotspots.
from both steady returns and capital appreciation as
Sanur becomes a more dynamic part of Bali’s real estate
landscape.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Uluwatu, located on Bali’s southwestern Bukit Peninsula, is renowned for

ULUWATU its dramatic cliffs, pristine beaches, and world-class surf spots. Over the years, it has
transformed into a premium destination known for its exclusive luxury resorts, cliffside
villas, and vibrant high-end party scene. Uluwatu’s allure extends beyond its natural
beauty, with a burgeoning restaurant scene and cliffside clubs that cater to affluent
tourists seeking a more upscale experience.

Market Trends:
Uluwatu’s real estate market has seen impressive growth, particularly in the luxury
segment. The area’s development is driven by demand for high-end villas, boutique
resorts, and wellness retreats, with many properties offering spectacular ocean views.
Uluwatu is also becoming a hotspot for fine dining, with trendy restaurants opening
up alongside its famous beach clubs. The combination of natural beauty and luxury
amenities has made it a prime location for investors targeting an upscale, international
clientele. While land prices have been rising, they remain more accessible compared to the
highly developed areas of Seminyak and Canggu, offering significant long-term growth
potential.

Challenges:
As Uluwatu continues to develop, infrastructure remains a work in progress in
certain parts of the Bukit Peninsula. Traffic congestion can be an issue during peak
tourist seasons, but plans for new road construction are underway to ease traffic flow and
improve connectivity within the area. These improvements will likely further enhance
Uluwatu’s appeal to both tourists and investors, making the region even more accessible
and convenient.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Investment Tip:
Uluwatu is an ideal market for luxury villa or resort developments, as well as high-
end hospitality ventures like beach clubs and wellness retreats. Its growing restaurant NUSA PENIDA
and nightlife scene, combined with the area’s stunning natural backdrop, makes it an
attractive destination for Its growing restaurant and nightlife scene, combined with the
area’s stunning natural backdrop, makes it an attractive destination for travelers seeking
a blend of relaxation and entertainment.
At Tipi Estate, we advise focusing on properties that offer cliff or ocean views, as
these continue to command high demand from international buyers. With the upcoming
infrastructure improvements, now is an excellent time to capitalize on Uluwatu’s growing
popularity.

Future Outlook:
Uluwatu’s future is bright, with large-scale luxury developments continuing
to shape the landscape. The area is increasingly being recognized as a high-end party
destination, home to exclusive cliffside clubs and trendy restaurants.
Additionally, the planned road construction to improve connectivity across the
Bukit Peninsula will make the region more accessible, further driving demand for luxury
real estate.
Investors who enter the market now stand to benefit from both the short-term
appeal of Uluwatu’s vibrant scene and the long-term appreciation of high-end properties.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Investment Tip:
Nusa Penida is ideal for investors looking for high-growth potential in eco-tourism
Nusa Penida, an island southeast of Bali, is a hidden gem rapidly gaining and boutique resort developments. The island’s pristine beauty and increasing popularity
attention from both tourists and investors. Known for its rugged coastline, crystal-clear among tourists offer a window of opportunity for those who act early.

waters, and stunning natural attractions like Kelingking Beach and Angel’s Billabong, At Tipi Estate, we recommend focusing on sustainable developments, particularly

Nusa Penida is becoming a go-to destination for adventurous travelers seeking unspoiled eco-resorts or wellness retreats that align with the island’s growing reputation for nature-

beauty. The island is more tranquil and undeveloped compared to Bali’s main tourist hubs, based tourism. With land prices considerably lower than Bali’s mainland, from 5 to 10
million per are per year for a lease, investors can secure large plots for future development
but its growing popularity presents vast opportunities for real estate investment.
at competitive rates.

Future Outlook:
Nusa Penida is on the cusp of becoming one of Bali’s hottest investment
destinations. As infrastructure continues to improve and tourism grows, the island’s real

Market Trends: estate market is expected to boom. Investors can expect significant capital appreciation

Nusa Penida’s real estate market is still in its early stages, which offers a unique as demand for villas and resorts increases.

chance for investors to enter at lower price points. Land prices are significantly cheaper Nusa Penida’s unspoiled landscapes and proximity to Bali make it an ideal location

compared to Bali, but as tourism grows, so do the prices. The island has seen a surge in for eco-friendly, luxury developments. With careful planning and a focus on sustainability,

interest, especially from investors looking to develop eco-friendly resorts, boutique early investors in Nusa Penida have the potential to realize high returns as the island

hotels, and private villas. matures into a premier destination for eco-tourism and luxury retreats.

Nusa Penida’s proximity to Bali, along with its breathtaking landscapes, makes
it an attractive location for travelers seeking a more remote yet accessible escape.
Infrastructure is improving, and with more tourist facilities and accommodations being
built, the island is set for a major.

Challenges:
While the potential for growth in Nusa Penida is clear, investors should be aware
of certain challenges. The island’s infrastructure, though improving, still lags behind
more developed parts of Bali. Roads can be rough, and access to utilities such as water and
electricity may require additional investment.
However, these challenges also present opportunities for investors willing to
pioneer high-quality developments, as the market is still relatively untapped. Care must
also be taken to respect the natural environment, as sustainability will play a key role in
the island’s future.

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The Definitive Guide to / Investing in Bali in 2024 The Definitive Guide to / Investing in Bali in 2024

Nusa Lembongan, one of the Nusa Islands southeast of Bali, is a well-

established destination known for its pristine beaches, crystal-clear waters, and thriving
NUSA LEMBONGAN surf scene. Compared to its larger neighbor, Nusa Penida, Lembongan is more developed
and has become a popular destination for tourists seeking a peaceful yet active getaway.
The island’s appeal to surfers, divers, and those in search of a more relaxed vibe makes it
an attractive choice for both visitors and real estate investors.

Market Trends:
Nusa Lembongan’s real estate market is more mature compared to nearby Nusa
Penida, with higher land prices reflecting its established status as a popular tourist
destination. The island caters to a niche market of surfers and eco-tourists, offering a
variety of boutique hotels, private villas, and beachfront properties.
Development is steady, and the island’s limited size ensures that land remains
valuable. While Nusa Lembongan still presents good investment opportunities, the
future potential is somewhat constrained by its smaller landmass compared to the more
expansive Nusa Penida.

Challenges:
The island’s relatively small size means that development opportunities are limited,
and much of the prime beachfront land has already been built on. Investors seeking large-
scale developments may find fewer opportunities here than in Nusa Penida.
Additionally, while the island is well-developed, infrastructure can still be an
issue in some parts, particularly for high-end projects that require more reliable utilities.
Despite these limitations, Nusa Lembongan’s established tourism infrastructure provides
a stable market for smaller boutique developments.

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Investment Tip:
Nusa Lembongan is ideal for investors targeting the surfing and eco-tourism
markets. Boutique hotels, beachfront villas, and mid-range resorts cater well to the
island’s primary visitors, who are typically surfers and nature enthusiasts. Given the
island’s already developed nature, securing prime locations with ocean views is key for
PERERENAN
high returns. At Tipi Estate, we recommend focusing on smaller, high-quality projects
that align with the island’s laid-back and eco-friendly ethos. While land prices are higher
than in Nusa Penida, they still offer good value for investors seeking stable, long-term
returns.

Future Outlook:
Nusa Lembongan’s future potential is solid, though somewhat limited by the
island’s size. Its established infrastructure and appeal to surfers ensure consistent tourist
traffic, and the growing interest in eco-friendly travel will likely support the demand
for sustainable developments. As a more mature market, investors can expect steady,
reliable returns rather than explosive growth. However, for those seeking long-term
value in a smaller, niche market, Nusa Lembongan remains an attractive and relatively
stable investment destination compared to the emerging markets on Nusa Penida.

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Investment Tip:
Pererenan remains a prime location for investors looking to develop or acquire
Pererenan, located just west of Canggu, has quickly transformed from a
luxury villas and high-end boutique hotels. The area’s reputation for offering an upscale
quiet coastal village into one of Bali’s most desirable and well-developed areas. Known
yet peaceful lifestyle is highly appealing to both expatriates and affluent tourists.
for its lush rice fields, scenic beaches, and a more refined atmosphere than neighboring
At Tipi Estate, we recommend focusing on properties that emphasize exclusivity
Canggu, Pererenan has become a magnet for expats, tourists, and high-end property
and privacy, particularly those with ocean views or nestled among Pererenan’s remaining
investors alike. Its upscale yet tranquil vibe, combined with proximity to popular dining
green spaces. Despite rising prices, the area continues to offer strong potential for high
and entertainment hotspots, has solidified Pererenan as a prime location for luxury real
returns due to its growing reputation as a luxury hotspot.
estate.

Future Outlook:
Pererenan’s future remains bright, with ongoing development further cementing
its status as a high-end destination. The area’s blend of natural beauty, modern amenities,
and proximity to Canggu’s vibrant scene ensures that it will continue to attract discerning
Market Trends: investors and buyers.
Pererenan’s real estate market has seen a significant boom, driven by both local and As land becomes scarcer and prices continue to rise, those who invest in Pererenan
international investors seeking premium properties. With Canggu becoming saturated now are likely to benefit from sustained growth in property values and rental demand.
and property prices there peaking, Pererenan has emerged as the next major destination Pererenan is set to remain one of Bali’s top markets for luxury real estate investment in
for luxury villas and boutique accommodations. the coming years.
The area is now fully developed, with modern amenities and infrastructure in
place, catering to the demand for high-end living. Land prices have risen considerably,
matching or even surpassing those in some parts of Canggu, reflecting the area’s new
status as a luxury destination.

Challenges:
Although Pererenan is now well-developed, the rapid growth has led to increased
competition for land and property. Investors should be mindful of rising property prices,
which may limit entry for those seeking more affordable opportunities.
Traffic and congestion are also growing concerns as the area’s popularity continues
to rise, though improvements to road access and local infrastructure are helping to
manage this.

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Seseh, Cemagi, and Nyanyi, located west of Canggu, are rapidly emerging
SESEH, CEMAGI, NYANYI as prime locations for real estate investment as development in nearby areas reaches
saturation. Known for their black sand beaches, rice fields, and a peaceful atmosphere,
these regions offer a serene alternative to the bustling hubs of Canggu and Seminyak.
Their proximity to these popular areas, combined with their more tranquil setting, makes
them increasingly attractive to both investors and high-end travelers.

Market Trends:
These areas are witnessing significant growth as investors seek new opportunities
west of Canggu. Seseh and Cemagi, with their quiet charm and close-knit communities,
have become popular for luxury villa developments and boutique hotels.
Nyanyi, particularly with the Nuanu development, is transforming into a more
urbanized village, with modern amenities and infrastructure designed to attract residents
and tourists alike. Land prices are rising steadily, but they remain more affordable
compared to Canggu, offering strong potential for long-term appreciation.

Challenges:
While Seseh, Cemagi, and Nyanyi are developing rapidly, infrastructure
improvements are still catching up in some areas. Investors should be aware that utilities
and road access may require additional investment, particularly in less developed parts.
However, these areas are quickly catching up, and the natural beauty and peaceful
environment make them desirable for exclusive developments.

Investment Tip:
For investors, these areas offer excellent opportunities in luxury villa developments,
eco-conscious resorts, and boutique accommodations. Properties with ocean views, rice
fields, or riverfronts are particularly appealing, and the unique landscape of these regions
can drive high returns. At Tipi Estate, we recommend focusing on high-end projects that
blend modern amenities with natural surroundings, especially in Nyanyi where the Nuanu
development adds a layer of modern lifestyle infrastructure.

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Future Outlook:
As Seseh, Cemagi, and Nyanyi continue to grow, they are expected to see significant
property value increases. With the Nuanu development acting as a catalyst for further
investment in Nyanyi, and the overall rise in demand for quieter, high-end living outside
of Canggu, these areas are poised to become some of Bali’s most sought-after markets.
TABANAN
Early investors in these regions will benefit from the continued expansion and increasing
demand for premium properties.

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Penebel, located in the same region, is known for its hot springs, waterfalls, and
mountain views. These areas are more remote, offering a peaceful retreat into nature
Tabanan is one of Bali’s most diverse and expansive regions, stretching from and ideal locations for eco-friendly developments, wellness retreats, or small boutique
the island’s scenic west coast to its lush interior. Known for its unspoiled beaches, accommodations focused on providing a connection with Bali’s natural beauty and
vast rice terraces, and mountainous landscapes, Tabanan offers a more authentic and traditional way of life.
peaceful Bali experience compared to its more tourist-heavy counterparts. The area is
split between coastal regions, which are drawing more interest from investors, and inland Challenges:
areas like Penebel and Jatiluwih, which are celebrated for their natural beauty and cultural While Tabanan presents many investment opportunities, particularly for those

significance. seeking to build in harmony with nature, it does come with certain challenges. The
region’s infrastructure, particularly in more remote inland areas, is still underdeveloped,
with limited access to modern utilities in some locations.
Investors need to be prepared for slower development timelines and a focus on
Coastal Areas: sustainable building practices to preserve the region’s natural and cultural integrity. The
Beaches and Development Potential distance from Bali’s more developed tourist hubs may also limit appeal for those seeking
Tabanan’s western coastline is home to black sand beaches and some of Bali’s most to attract short-term vacationers.
stunning natural landscapes. These coastal areas, including the beaches of Kedungu, Yeh
Gangga, and the quieter regions of Balian and Surabrata, are gaining traction among Investment Tip:
investors who seek an alternative to the increasingly crowded tourist hubs of Canggu For coastal areas, beachfront properties near Kedungu and Yeh Gangga are the
and Pererenan. The relatively untouched nature of these beaches makes them ideal for most desirable, particularly for high-end villas or eco-conscious developments. Inland,
luxury villa developments, eco-resorts, and boutique hotels. Surfers are also drawn to Jatiluwih and Penebel offer unique opportunities for eco-tourism, wellness retreats, and
this coast, similar to Kedungu, which presents a niche market opportunity for surf lodges boutique resorts that cater to travelers seeking tranquility and a deeper connection to
and beachfront accommodations. nature. At Tipi Estate, we recommend looking for land with river, jungle, or rice terrace
views, as these locations are highly sought after and will likely appreciate significantly in
Market Trends: value over time.
As the coastal areas of Tabanan become more developed, land prices have started
to rise, though they remain significantly more affordable compared to southern Bali. Future Outlook:
Investors are particularly interested in beachfront properties and plots with panoramic Tabanan’s future as a real estate destination is bright, with both its coastal and
ocean views. The appeal of these areas lies in their tranquility and seclusion, offering inland regions offering distinct yet complementary opportunities for investment. Coastal
privacy without being too far from the more developed regions of Bali. With infrastructure areas will continue to grow in popularity as more investors seek alternatives to the
slowly improving, including better road access and utilities, Tabanan’s coastal areas are crowded southern beaches, while inland regions like Jatiluwih and Penebel will appeal to
set for long-term growth. those looking for eco-friendly, sustainable developments. As infrastructure improves and
tourism continues to expand beyond Bali’s more traditional hotspots, Tabanan is poised
Inland Areas: to become a key player in Bali’s real estate market, particularly for investors interested in
Penebel and Jatiluwih sustainable, nature-focused projects.
Further inland, Tabanan’s landscape transforms into lush, rolling hills and
expansive rice terraces. The most famous of these is Jatiluwih, a UNESCO World Heritage
site renowned for its stunning terraced rice fields, which are not only a tourist attraction
but also a symbol of Bali’s cultural and agricultural heritage.

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OTHER LOCATIONS:
AMED, KINTAMANI, LOVINA,
MUNDUK, AND MEDEWI

03
Bali’s lesser-known areas—Amed, Kintamani, Lovina, Munduk, and Medewi— CHAPTER
offer unique investment opportunities for those looking beyond the island’s mainstream
tourist hubs. These regions, while less developed, present excellent potential for
significant returns, particularly in eco-tourism and niche markets such as wellness
retreats and surf camps. However, they require patience as development is slower, and
infrastructure is still evolving.

Amed is a diver’s paradise, ideal for beachfront resorts and eco-conscious

projects, with land prices still relatively affordable. Kintamani, with its stunning views
of Mount Batur, offers opportunities for nature-based lodges and wellness retreats in a
serene mountain setting.

Lovina is a relaxed, northern coastal town popular with retirees and families, where
beachfront developments and eco-tourism ventures are growing. Munduk, known for its
waterfalls and cooler climate, is perfect for small, sustainable retreats in the lush highlands.
INVESTMENT
Lastly, Medewi, a quiet surf destination, presents excellent potential for surf
OPPORTUNITIES IN BALI
camps and boutique resorts as it becomes more popular with the surf community. These
areas are less common in the Bali investment scene, but for the right projects, they offer
strong long-term growth potential.

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VILLAS
Villas are one of the most popular real estate investments in Bali, particularly in
high-demand areas like Ubud, Canggu, and Uluwatu. These properties attract both
tourists seeking short-term rentals and expatriates looking for longer stays, making
them a strong option for rental income and capital appreciation.

Advantages:
• High demand from tourists, particularly in luxury villa markets.
• Villas can be rented out and used for personal stays.
• Significant potential for returns, especially in prime areas.
• Existing villas with proven rental track records offer a safe and straightforward
investment opportunity, reducing risk for investors.
Bali offers a diverse range of real estate investment opportunities, from luxury villas
to eco-friendly resorts and land development projects. Each type of investment has its
Budget:
own set of advantages, challenges, market demands, and potential returns. This chapter
• Studios or Single-Bedroom Villas: Entry price for a villa in Bali will be 150,000$.
explores the key types of real estate investments in Bali and helps investors identify the
• Mid-Range Villas: Starting from $200,000 to $500,000. Typically, these are 2-5
best option for their specific objectives, along with expected ROI estimates.
bedroom villas in emerging or less tourist-heavy areas.
• Luxury Villas: $500,000 to $2 million or more, often located in prime locations with
high-end finishes and premium amenities, such as beachfront access or panoramic
views.

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LAND DEVELOPMENT
Considerations:
• Initial investment costs can be high, particularly for luxury villas in premium locations. Land development in Bali provides investors with the opportunity to significantly
• Off-plan villas can take more than a year to be delivered but usually offer the best reduce the cost of a villa by building it themselves, which increases ROI and allows for
returns once built.
complete customization of the property.
• Ongoing maintenance and management are necessary to keep the villa competitive in
This type of investment offers flexibility for both personal villa projects and larger
the rental market.
development plans. However, it’s a challenging path that requires a strong network of
• Location is key—villas in prime areas will generate higher returns. Views and
local experts to navigate legal, regulatory, and infrastructure hurdles.
architecture also play a significant role in a villa’s performance.

Land development is a less costly alternative to buying off-plan, and it can be

Estimated Yearly ROI:
highly rewarding if managed well. Investors can follow one of two paths:
• For Existing Villas : 10-15% ROI in short-term rental and 5-10% in long-term rental.
We recommend always asking for a rental track record when purchasing an existing
1. Building and renting out a single villa—similar to buying an existing or off-plan villa,
villa.
but with more control over design and construction costs.
• For Off-Plan Villas : 12-20% ROI in short-term rental, with the higher side usually seen
2. Developing larger projects—leasing land to sell off-plan villas as part of a bigger
in trending markets such as Uluwatu and Pererenan, driven by higher rental demand,
development project, which is more common among professional developers.
or in growing areas like Nusa Penida, driven by capital appreciation.

Advantages:
• Reduced costs compared to purchasing off-plan or existing villas.
• Full control over the villa’s design, architecture, and layout.
• Potential for higher returns due to lower construction costs.
• Multiple paths: building and renting out or selling off-plan villas.

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Considerations:
BOUTIQUE HOTELS
• Development is complex and time-consuming, requiring significant expertise and a AND ECO-RESORTS
local network. It is usually not recommended to go this path unless you are based in
Bali and actively involved in the process.
Bali’s tourism industry is booming, with travelers seeking unique, eco-conscious,
• Not all land development projects capitalize on land appreciation; this is highly
and luxury experiences. Boutique hotels and eco-resorts cater to these travelers by
dependent on location.
offering personalized, environmentally friendly accommodations. These types of
• The selling process for off-plan villas can be long, as buyers are often cautious due to
the influx of inexperienced developers. investments appeal to a growing demographic of tourists looking for sustainable travel

• Requires patience and the ability to manage long-term projects with uncertain experiences, making them a particularly attractive option.

timelines.

Estimated Yearly ROI:

• For Building and Renting Out: ROI is highly variable depending on the market, and the
costs you manage to negotiate for construction. ROI can reach up to 30% per year in
high-demand regions.
• For Developing Larger Projects: Higher risk comes with higher rewards. The right
project can deliver an ROI close to 100% over the development period.

Budget:
• Small Plot Development (e.g., Single Villa): Starting from $150,000 to $500,000,
depending on land size (typically 3-10 are) and location.
• Large Development Projects: $300,000 to $5 million or more, for larger plots (e.g., 1
hectare or more) intended for multiple villas or resort-style developments.

Advantages:
• Growing demand for boutique and eco-conscious accommodations.
• Opportunity to differentiate through unique design, sustainability, or wellness
offerings.
• High potential for occupancy, especially in niche markets such as eco-tourism or
wellness retreats.
• Positive public image and appeal to responsible travelers.

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OTHER TYPES
Considerations:
• Significant initial investment required for construction and eco-friendly infrastructure. OF INVESTMENTS
• Ongoing management and marketing are essential to maintaining occupancy rates
and profitability.
• Targeting the right market (e.g., eco-tourism, wellness, luxury) is critical for success.
Beyond villas, land, and boutique
• Requires expertise in hospitality management or partnership with an experienced
operator. hotels, Bali offers other real estate
investment options, such as co-working

Estimated Yearly ROI: spaces, rental apartments and land

• ROIs for Boutique Hotels and Eco-Resorts can vary significantly depending on the banking. These alternatives provide
concept, marketing, location, amenities, and staff. Investors can expect between opportunities to cater to expatriates,
10%-30% ROI, with potential for growth in early markets. digital nomads, or local businesses.

Budget:
• Small Boutique Hotels/Eco-Resorts: $500,000 to $2 million, typically for properties
with 5-15 rooms in emerging areas. Commercial Properties:
• Larger Boutique Hotels/Eco-Resorts: $2 million to $10 million or more, for properties Office buildings, retail spaces, restaurants and co-working hubs
in prime locations or those offering extensive amenities and services. are growing in demand, particularly in areas with a large expatriate
community

Rental Apartments:
Apartments can offer an interesting and sometimes more affordable
alternative for those looking to be part of a larger development. These
projects often come with more amenities and shared management,
making them an attractive option for investors seeking ease of
management and modern conveniences.

Land Banking:
This investment is often seen as a bet on future growth. The right
location can reward investors with substantial returns, potentially
multiplying their initial investment. However, land banking can take
many years to deliver results, and there’s the risk of being stuck with
land that cannot be used if the market does not develop as expected.
This strategy is only available for freehold land and is generally reserved
for experienced investors who understand the risks and rewards.

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WHICH INVESTMENT QUESTIONS TO ASK YOURSELF

FOR WHO? BEFORE CHOOSING AN
INVESTMENT
Different types of real estate
investments in Bali cater to various Before committing to a real estate investment in Bali, it’s important to reflect on
investor profiles. Here are some key your goals, involvement level, and long-term plans. Consider these questions to help
examples to help identify the best match guide your decision:
for your investment goals:

• How involved do you want to be?

Some investments, like land development or boutique hotels, require hands-on
• The Short-Term Profit Seeker (“The Flipper”): This investor is looking involvement and management. Others, like purchasing an existing villa with a track
for quick returns and will typically choose an off-plan villa in a booming record, can be more passive.
or growing market. Their strategy is to enjoy rental revenues for 5 years,
then sell the villa at a profit. They may also choose to build and develop on • How often do you plan on going to Bali?
their own land, taking advantage of rising land values and market demand. If you plan on spending significant time in Bali, investing in a villa you can personally use
and rent out part-time may be ideal. If your visits are infrequent, an investment that
• The Retirement Planner (“The Nest Builder”): For investors who want steady, requires less oversight may be better.
long-term income as they prepare for retirement, buying an existing villa with a
proven rental track record in a stable, well-known market is the best option. This • What is your risk tolerance?
ensures stable, reliable revenues. Alternatively, they can trust an experienced Land banking and off-plan projects can yield high returns, but they come with higher
developer with an off-plan property that can yield consistent income for years. risks and longer timelines. Existing villas and rental apartments offer more stability but
may not have the same upside potential.
• The Entrepreneur (“The Developer”): Investors with an entrepreneurial spirit can
take the developer route, building and selling off-plan villas or pursuing the boutique • What is your timeline for returns?
hotel business. These paths require hands-on involvement, offering both creative Are you looking for quick returns or a long-term, stable income stream? Short-term profit
control and the potential for higher returns through managing multiple projects. seekers may prefer off-plan villas in trending markets, while those with long-term goals
might focus on freehold properties or rental apartments.
• The Long-Term Diversifier (“The Wealth Protector”): Investors with deep
pockets, looking to diversify their portfolio, can invest in a mix of safe properties— • Do you have a local network in Bali?
such as freehold villas—and more speculative opportunities like land banking for Navigating legalities, regulations, and development processes can be difficult without
future high rewards. This strategy balances low-risk, steady income with the potential local expertise. If you’re not based in Bali or don’t have a reliable network, consider projects
for large returns over the long term. with more established developers and property agents.

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04
CHAPTER

LEGAL AND REGULATORY

CONSIDERATIONS FOR
FOREIGN INVESTORS Investing in Bali’s real estate market is an exciting opportunity, but it also comes
with specific legal and regulatory considerations, particularly for foreign investors.
This chapter provides an overview of Indonesian property laws, ownership
structures available to foreigners, and the processes and costs involved in purchasing and
selling property.

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OVERVIEW OF INDONESIAN OWNERSHIP STRUCTURES

PROPERTY LAWS RELEVANT FOR FOREIGN INVESTORS
TO FOREIGNERS
Foreign investors looking to acquire property in Indonesia, particularly in Bali, have
several legal options. Each ownership structure offers a different approach depending on
the investor’s goals, whether for residential or commercial purposes.
Indonesia’s legal framework places restrictions on direct property ownership by
foreigners, but several mechanisms allow for investment in real estate. Understanding
Hak Pakai (Right to Use):
these laws is crucial to ensuring that your investment is both secure and compliant with
Hak Pakai is a legal right that allows foreigners, including those with a KITAS (residence
local regulations.
permit) or foreign governments or companies, to use and manage land owned by the state
or private individuals. This right can last for a maximum of 25 years, with the possibility
of extensions up to 80 years. It is often applied to state-owned land or property and can
• Foreign Ownership Restrictions: be used for residential or commercial purposes, such as establishing a business. Hak

Foreigners are not allowed to directly own land (Hak Milik) in Indonesia. However, they can Pakai does not grant full ownership and is most commonly used by expatriates or larger

legally acquire rights to property through long-term leases or other ownership structures. organizations seeking long-term use of land for operations in Indonesia.

Hak Sewa (Leasehold):

• Usufruct Rights (Hak Pakai):
Leasehold is the most common and recommended structure for foreigners investing in
This is a right-to-use structure allowing foreigners to lease land or property for an
Bali. It allows foreign investors to lease land or property from Indonesian citizens for a set
extended period. It’s not a very common option but can be used by foreign investors in
period, typically between 25 and 30 years, with an option for renewal. This structure is
certain cases, typically for up to 80 years (initially 30 years, extendable by two additional
widely used for residential villas and hospitality developments. It offers flexibility without
periods of 20 and 30 years).
the legal complexities of full ownership, making it a preferred choice for medium- to
long-term investments.
• Leasehold (Hak Sewa):
Leasehold is the most common and recommended structure for foreigners seeking to
invest in Bali. Foreign investors can lease land or property from an Indonesian citizen or
entity for an agreed-upon period, usually lasting 25 to 30 years, with the possibility of
extension.

• Corporate Ownership (Hak Guna Bangunan - HGB):

Foreigners can set up an Indonesian limited liability company (PT PMA) to legally purchase
property under a HGB title, which grants the right to build on and use the land for up to 80
years. HGB is commonly referred to as “Freehold” for foreign investors as it is the closest
equivalent to ownership.

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PT PMA with Hak Guna Bangunan (HGB - Right to Build):

Foreigners can establish a PT PMA (foreign-owned company) to hold property under a
Hak Guna Bangunan (HGB) title. HGB allows the construction and ownership of buildings
PROCESS OF PURCHASING
on land owned by the state or another party for up to 80 years (30 years initially, with
extensions). This is the most secure structure for long-term property investment,
AND SELLING PROPERTY
allowing foreigners to operate businesses, such as resorts or villas, in compliance with IN BALI
Indonesian law.

Nominee Arrangements (Forbidden):

Using a local Indonesian citizen as a nominee to hold property on behalf of a foreign LEASEHOLD (HAK SEWA)
investor is strictly forbidden under Indonesian law. The Anti-Dummy Law explicitly
prohibits such practices, and engaging in nominee agreements can lead to severe legal
consequences, including the potential confiscation of the property and penalties for both The leasehold process is simpler and more common for foreign investors, particularly

the foreign investor and the nominee. This structure is highly risky and should never be for those looking to invest in villas or rental properties for medium- to long-term stays.

considered as a viable option for property acquisition by foreigners in Indonesia.

1. Required Documents: The only document needed to enter into a leasehold agreement
is a valid passport. No corporate structure is required, making this the easiest and most
common option for foreign investors.
2. Due Diligence: Before signing a lease, it’s essential to conduct due diligence, which
includes verifying the land’s title, zoning regulations, and any existing agreements.
While most real estate agents handle these checks, it’s crucial to engage a notary
(notaris) or legal professional to ensure the lease is valid and free of encumbrances.
3. Offer and Agreement: Once terms are agreed upon, both parties sign either a
Memorandum of Understanding (MOU)—a pre-agreement outlining the main terms of
the deal and used to secure the land with a deposit—or a Lease Agreement directly. Most
leases contain key details such as the land and owner information, surface area, lease
term (typically 25-30 years), rental payment terms, and conditions for extensions. A
notary ensures the contract is legally binding.
4. Payment and Transfer: Payments are usually made in installments or as a lump sum.
The property is not transferred but leased, allowing the foreign investor to use or rent
out the property during the lease period.
5. Note on Lease Extensions: While many lease agreements include a priority extension
clause, meaning the tenant will have priority in renewing the lease after its term,
extensions are never fully guaranteed. To improve your chances of securing an extension,
it’s highly recommended to maintain a good relationship with your landowner.
Additionally, rather than waiting until the last minute, it’s best to start the extension
process after 5 to 10 years to avoid any difficult disputes or negotiations that may arise
closer to the lease’s expiration.

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FREEHOLD (HAK GUNA BANGUNAN - SELLING OR TRANSFERRING

HGB) VIA PT PMA PROPERTY IN BALI
For foreigners seeking long-term property ownership or the closest equivalent When selling property in Bali, the process varies depending on whether you’re selling
to freehold, establishing a PT PMA (foreign-owned company) and acquiring a Hak Guna HGB freehold land or transferring the rights of your leasehold property. Understanding the
Bangunan (HGB) title is the most secure option. This approach is ideal for large-scale legal landscape and working with qualified agents is critical to avoid pitfalls.
developments or commercial operations.

1. Required Documents: Foreign investors must first establish a PT PMA, which involves 1. SELLING HGB LAND (FREEHOLD)
submitting company incorporation documents to the Indonesian government. The
PT PMA acts as the legal entity that will hold the HGB title. Setting up a PT PMA can be
facilitated by many legal services firms in Bali, such as Tipi Estate partners. The process Key Steps:
typically takes about one month and costs around 30 million rupiah.

Work with a Qualified Agent: Notary Process:

2. Due Diligence: Similar to the leasehold process, due diligence is required. The notary
Selling HGB land in Bali involves Once a buyer is found, both
verifies that the land title is clear of disputes and suitable for development. Zoning and
navigating Indonesian legal requirements. parties must sign the Sales and Purchase
building permits are reviewed to ensure compliance with local regulations.
Foreigners should always work with a Agreement (Akta Jual Beli). A notary will
qualified agent, such as Tipi Estate, to oversee the transaction, ensuring that
3. Offer and Agreement: A Sales and Purchase Agreement (Akta Jual Beli) is signed between
avoid scams and legal issues. There have the transfer complies with Indonesian
the PT PMA and the landowner, outlining the terms of the purchase, including the price,
been instances of foreigners trying to property laws. The property will be
payment schedule, and HGB rights. The notary ensures the agreement complies with
sell property without an authorized legal officially transferred once all payments are
Indonesian law.
entity (such as a PMA), which has led to complete.
serious legal problems. An experienced
4. Payment and Transfer: Once payments are complete, the HGB title is transferred to the
agent will ensure compliance and market
PT PMA, allowing the foreign-owned company the right to build and operate on the land
the property effectively.
for up to 80 years (initially 30 years, with extensions). The PT PMA owns the buildings,
while the land remains under state or private ownership.
Optimize Your Property Taxes and Fees:
5. Downgrading Process: If the land was originally Hak Milik (Freehold), there is a for Sale: Sellers must pay a Capital Gains Tax
downgrading process after the sale that converts the land from Hak Milik to Hak Guna Before listing the property, consider of 2.5% of the sale value. The buyer typically
Bangunan (HGB), unless it was already owned by a PT PMA under HGB status. This cosmetic renovations. Small investments pays a Land and Building Acquisition Duty
process ensures compliance with Indonesian regulations, as foreigners cannot directly in repairs and updates can significantly (BPHTB) of 5% of the property’s sale value,
own freehold land. The HGB title grants foreign investors a long-term, secure right to boost appeal and sale value. along with notary fees ranging from 0.5%
develop and use the land while remaining compliant with property ownership laws. to 1%.

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2. TRANSFERRING THE RIGHTS OF

A LEASEHOLD PROPERTY

Key Steps:

Work with an Authorized Notary and Transfer:

Real Estate Agent: The notary will oversee the signing
As with HGB sales, it is critical to of the Transfer of Lease Agreement and
work with a qualified real estate agent to handle the official registration of the new
ensure compliance with local regulations. leaseholder. The buyer may be required to
Trying to transfer the lease without an pay BPHTB, depending on the agreement.
authorized entity could lead to significant FREEHOLD VS. LEASEHOLD
legal complications.

Choosing between Freehold resorts, as the security of Freehold

and Leasehold depends largely on your ownership can make the property easier
Optimize the Property: Lease Tax:
investment goals and the type of project to sell or attract additional investors.
Similar to selling HGB land, making When transferring a lease, a lease
you want to pursue. Freehold (HGB) is The long-term safety and certainty that
cosmetic updates can enhance the tax applies. For Indonesian tax residents,
often a more expensive option, especially Freehold offers often make it a stronger
property’s value. Even minor repairs can such as a PMA, the tax is 10% of the entire
in developed areas of Bali, and requires a asset for commercial ventures.
make a notable difference to potential lease amount. For foreigners, the tax is higher initial investment. Whether you are
buyers. 20% on the whole lease amount. This tax planning to build a villa or a commercial For developers, both Freehold and
must be considered when determining the business, the ROI tends to be lower, and it Leasehold are viable options. Freehold
final transfer price. usually takes 2 to 3 times longer to recoup has the advantage of allowing sales as
your investment, not accounting for Hak Milik to Indonesian buyers, as well as
capital appreciation. offering the option to lease the property
Extend the Lease:
for up to 80 years to foreigners, which
If your property has less than 20 years
For investors looking to make can be a strong selling point. However,
remaining on the lease, consider extending
quicker profits, Leasehold is often the Freehold comes with a much higher initial
it by 5-10 years before listing it. Short
recommended option. With Leasehold, investment. Leasehold is a common
lease terms can significantly depreciate you can typically recover your investment choice among developers because it
the property’s value, and it is typically less within 8 years, after which you can either offers greater flexibility and lower initial
costly to extend the lease than to sell a extend your lease or transfer it to another costs. If you are uncertain, consulting
property with a short lease. Extending only buyer. Freehold, on the other hand, can be with local experts like Tipi Estate can help
involves negotiating the land price, making a smarter choice for long-term business determine the best ownership structure
it a worthwhile investment. developments, such as boutique hotels or for your specific project.

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PMA OR NO PMA? TAXES AND FEES ASSOCIATED

WITH REAL ESTATE
The decision to establish a PMA leasing a villa and using the rental income
TRANSACTIONS
(Foreign-Owned Company) or not is a abroad, without reinvesting in Indonesia, a
critical one that can have lasting financial PMA may impose unnecessary tax burdens, When engaging in real estate transactions in Bali, several taxes and fees apply,
implications. To make this decision, you and simply leasing under your name might depending on whether you’re purchasing, selling, or transferring a leasehold property.
should first consider your long-term be a better option. Understanding these costs upfront can help investors properly budget and avoid surprises.
investment plans in Indonesia. A PMA On the other hand, if you plan to
is a company, and with it comes the develop multiple properties or reinvest the 1. Buyer’s Taxes: Land and Building Acquisition Duty (BPHTB): This tax is typically 5%
responsibility of hiring an accountant and revenues into other projects without taking of the sale value or the government-assessed taxable value of the property (whichever
filing regular tax reports. dividends out of Indonesia, establishing a is higher). It is paid by the buyer upon purchasing a property and must be settled before
If you are investing in a Freehold PMA can be more advantageous. It allows the transfer of ownership or leasehold rights.
property, forming a PMA is a requirement, you to hold and manage multiple properties 2. Seller’s Taxes:
as it is the only legal way for foreigners to under one entity, and reinvestment can be • Capital Gains Tax (PPh): Sellers are subject to a 2.5% income tax on the sale price when
own property under Hak Guna Bangunan streamlined within the company without selling freehold property (HGB). This tax is applied to the full transaction value.
(HGB). However, if your strategy involves triggering unnecessary tax obligations. • Lease Tax: When transferring the rights to a leasehold property, a lease tax applies based
on the lease’s total value:
• 10% for Indonesian tax residents, which includes PMA entities.
• 20% for non-tax residents (foreign individuals or entities). This tax is applied
to the entire lease amount and must be factored into the final transaction price.
3. Notary Fees: A notary (notaris) is required to formalize and legalize the transaction.
Notary fees typically range from 0.5% to 1% of the property’s sale value, depending
on the complexity of the deal. The notary ensures all legal documents are in order and
assists in registering the transaction with the National Land Agency (BPN).
4. Annual Property Taxes:
• Land and Building Tax (PBB): Property owners must pay an annual tax based on
the assessed value of their land and buildings. The rate is 0.5% of the government-
determined property value. This applies to both freehold and leasehold properties.
5. Corporate Taxes (If Applicable): For investors who own property through a PT PMA,
additional corporate taxes may apply depending on the company’s revenue and
property use. Profits made by the PMA are subject to corporate income tax, which must
be regularly reported.

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PERMITS AND OTHER

IMPORTANT LEGAL
DOCUMENTS

05
When investing in property or developing real estate in Bali, ensuring that you CHAPTER
have the correct permits and legal documents is crucial for compliance and long-term
success. Indonesian law requires specific permits for different types of buildings, whether
for residential or commercial purposes, and some key documents must be secured before
commencing construction or renting out properties.

1. Pondok Wisata (Commercial Villa Permit)

If you plan to rent out your villa to tourists or short-term visitors, you will need a
Pondok Wisata permit. This permit allows villas to operate legally as commercial rental
properties. Without a Pondok Wisata, renting a villa on platforms like Airbnb or Booking.
com could lead to fines or legal complications. The process for obtaining this permit includes
an inspection by local authorities and ensuring that the villa meets safety and operational
standards. Most property managers in Bali can help with obtaining a Pondok Wisata.

2. PBG/SLF (Building Approval and Certificate of Building Feasibility) LOCAL INSIGHTS

The PBG (Persetujuan Bangunan Gedung), which replaced the former IMB (Izin
Mendirikan Bangunan or Building Permit), is now the legal requirement for constructing FOR SUCCESSFUL
any building in Indonesia. The SLF (Sertifikat Laik Fungsi) or Certificate of Building Feasibility
is issued once the building is completed, certifying that it complies with all regulatory INVESTMENT
standards and can be safely used.
Both the PBG and SLF are essential for any type of real estate development, whether
for villas, commercial properties, or hotels. These documents ensure that the building
meets safety, design, and environmental standards as required by local law. Without
these permits, the building is considered illegal, and property owners may face significant
penalties.

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UNDERSTANDING LOCAL
CUSTOMS AND COMMUNITY
RELATIONS

In Bali, social and cultural norms play a significant role in everyday life and can
impact business and investment decisions. Balinese society is deeply rooted in traditions
and spirituality, with strong community bonds known as “banjars.” Understanding and
respecting these customs is crucial for any foreign investor.

• Respect for Religious

Practices:
• Community
Bali is predominantly Hindu, and religious
Engagement:
ceremonies are an integral part of daily
In many cases, involving the local banjar
life. It’s essential to be aware of major
(village community) in your project can
holidays and rituals, as they can affect
foster positive relations. This might
everything from construction schedules
include hiring local workers or supporting
to community events.
community projects, which in turn
Investing in Bali’s real estate market requires not only a clear understanding of
builds trust and can ensure smoother
legal regulations and market trends but also a deep knowledge of local customs, culture, For example, Nyepi Day (the Day of
operations.
and community dynamics. Silence) is a holiday during which all
activities come to a halt, and even airports
Understanding the influence of
This chapter will provide key insights for foreign investors to help them successfully close. Participating in or respecting local
community leaders, or “elders,” will also
navigate the unique landscape of Bali. religious practices will help build goodwill
help you navigate local expectations.
with your neighbors.

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BUILDING AND MAINTAINING OTHER TIPS FOR NAVIGATING

RELATIONSHIPS WITH LOCAL THE BALI REAL ESTATE
STAKEHOLDERS MARKET AS A FOREIGNER
Your success in Bali’s real estate market will depend largely on the relationships you • Cultural Sensitivity:
build with local stakeholders, from landowners to government officials. A collaborative and Bali is a popular destination for expatriates, but it is important to remember that it remains
respectful approach is key. a deeply traditional society. Being sensitive to the local culture—whether by adhering to
proper dress codes in temples, observing local customs, or respecting community norms—
• Landowners and Neighbors: will help you integrate more seamlessly.
If you are entering a lease agreement, maintaining a strong, positive relationship with the
landowner is crucial. A good relationship can simplify future lease extensions and avoid • Patience with Bureaucracy:
potential disputes. Furthermore, cultivating strong ties with neighbors and the broader Bali’s administrative processes can sometimes be slow and complex. Whether you are
community can ensure the long-term sustainability of your project. waiting for permits, dealing with land disputes, or navigating tax regulations, patience
and persistence are essential. Local experts like Tipi Estate can help guide you through the
• Local Officials and Regulatory Bodies: process and ensure that everything is handled properly.
Navigating the bureaucratic processes in Bali can be complex, and relationships with
local government officials can make a significant difference in how smoothly your project • Negotiation Tactics:
proceeds. When obtaining permits or dealing with zoning regulations, having local partners Bali’s real estate market is dynamic, but negotiation is still part of the game. It’s common
who know the landscape and who can manage these relationships can be invaluable. to engage in long discussions over property prices, lease terms, or agreements. Having a
local advisor or real estate agent can help ensure you approach negotiations with the right
• Local Business Partners: cultural understanding.
It is important to consider working with local businesses, contractors, and service providers.
Building local partnerships not only demonstrates a commitment to the community but • Language Barriers:
also helps you navigate the business environment more efficiently. Establishing ties with While many Balinese people speak English, especially in tourist areas, it is still helpful to have
reputable real estate agents, notaries, and legal advisors will make sure you have a well- someone on your team who speaks Bahasa Indonesia. This can be particularly important
rounded support system in place. when dealing with legal documents, government officials, or more rural areas of Bali.

Note: Most of these insights apply directly to investors such as developers or those planning
to build villas themselves. For investors purchasing an off-plan villa, the developer will
usually ensure they have strong local relationships, meaning clients don’t need to worry
about navigating these local complexities.

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CASE STUDY 1:
TOBY FROM AUSTRALIA
BUYS A 2-BEDROOM OFF-

06
PLAN VILLA IN ULUWATU
• Introduction to the Case Study:
CHAPTER Toby, a young professional from Australia, was looking to diversify his investment
portfolio and explore real estate opportunities in a growing foreign market. He had
always been interested in Bali due to its tourism appeal and saw the island’s booming
rental market as a way to secure passive income.

His goal was to find a property that would deliver steady returns while allowing him to
enjoy the tropical lifestyle during personal vacations. Uluwatu, a hotspot for surfers
and tourists seeking luxury escapes, became the ideal location for his search.

• Why Toby Chose to Invest:

Toby was specifically seeking an off-plan villa because it offered a lower entry
point compared to buying an existing property. He knew that by purchasing
pre-construction, he could secure a better price and capitalize on the property’s

CASE appreciation once it was built. His primary investment criteria included:

STUDIES • High Rental Demand:

Toby wanted to invest in an area with consistent tourist traffic to ensure high
occupancy rates.

• Modern Amenities:
The villa had to offer luxury features like a private pool, modern design, and high-
end furnishings to appeal to short-term vacationers.

• Minimal Involvement:
As a busy professional, Toby was looking for a hands-off investment. He wanted to
rely on a trusted developer and property management team to handle the day-to-
day operations and marketing.

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• How He Found the Developer (Tipi Estate): Lessons Learned & Key Takeaways:
Toby connected with Tipi Estate during his initial research phase. He had read about
their reputation for helping foreign investors navigate the complexities of Bali’s real • Strategic Location:
estate market and trusted their local expertise. Choosing an off-plan villa in a high-demand area like Uluwatu, where tourism is
booming, was key to achieving high rental returns.
After discussing his goals, Tipi Estate introduced Toby to a reputable developer
with a strong track record of delivering high-quality off-plan villas in Uluwatu. This • Developer Trust:
developer had multiple completed projects, offering Toby confidence in their ability Partnering with a reputable developer and real estate agent like Tipi Estate ensured
to meet timelines and deliver a premium product. the project was delivered on time and met expectations.

• Hands-Off Approach:
Steps Taken: By relying on Tipi Estate’s management and marketing services, Toby was able to
focus on his career while his investment generated passive income.
• Acquisition:
Tipi Estate facilitated the entire acquisition process. Toby signed a Memorandum
of Understanding (MOU) with the developer, securing his 2-bedroom villa at a pre-
construction price of USD 250,000. A notary was involved to verify the contract,
ensuring legal compliance with Bali’s property laws.

• Construction & Timeline:

Over the next 18 months, the villa was constructed according to plan. Toby monitored
progress remotely with regular updates from the developer and Tipi Estate. The
villa featured a sleek, modern design with a private pool, aligning with the luxury
demands of Uluwatu’s rental market.

• Rental & Income Generation:

Once completed, the villa was listed on vacation rental platforms, targeting short-
term holidaymakers. Due to Uluwatu’s popularity among tourists, the villa achieved
an 85% occupancy rate in its first year, generating steady rental income.

• ROI:
Based on the strong rental performance, Toby expects to fully recover his initial
investment within 6-7 years. After that, the property will continue to generate
profit, offering a mix of passive income and personal enjoyment when he visits.

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CASE STUDY 2: • How They Found the Land and Started the Project:
Marie and Thomas connected with Tipi Estate, who helped them locate an 800 sqm

MARIE AND THOMAS FROM plot in Ubud. They appreciated the property’s serene rice field views and proximity
to wellness centers. The land was acquired via a 25-year leasehold with an option to

FRANCE BUILD TWO VILLAS extend for another 25 years. The total cost of the land was 800,000,000 IDR (USD
50,000).
IN UBUD
Steps Taken:
• Introduction to the Case Study:
Marie and Thomas, a couple from France, were drawn to the idea of building their • Land Acquisition:
dream eco-luxury villas in Bali. They saw Ubud, with its cultural richness and wellness With the help of Tipi Estate, Marie and Thomas completed due diligence to verify
tourism, as the perfect location. the land’s title, zoning, and legal standing. A local notary formalized the leasehold
agreement, ensuring the couple’s investment was protected under Indonesian law.
Their investment wasn’t just about generating financial returns, but also creating a
tranquil retreat they could enjoy for part of the year. After deciding to purchase land • Design and Planning:
and oversee the entire project from design to construction, they chose a long-term They collaborated with a local architect specializing in eco-designs to build two
strategy with sustainable principles in mind. luxury villas incorporating bamboo, reclaimed wood, and solar panels. Additionally,
they hired a project manager who acted as a third-party representative to oversee
construction and maintain quality control while Marie and Thomas remained in
• Why Marie and Thomas Chose to Invest in Ubud:
France. The total construction budget, including project management, came to
They selected Ubud for its appeal to eco-conscious tourists and wellness travelers.
4,800,000,000 IDR (USD 300,000).
The area’s popularity with expatriates and tourists made it ideal for long-term rental
income, while its natural beauty aligned with their personal values of sustainability.
Their investment goals included: • Construction Process:
Over 20 months, the villas were built according to plan, though there were some
delays in securing building permits (PBG/SLF) and aligning with local regulations.
• Capital Appreciation and Rental Income:
The project manager played a crucial role in keeping everything within budget and
They were aiming for consistent returns through rentals while benefitting from land
ensuring high-quality craftsmanship.
appreciation in Ubud.

• Sustainability Focus: • Rental Management:

Upon completion, Tipi Estate introduced Marie and Thomas to a reputable property
Their villas needed to be eco-friendly, with renewable energy systems and natural
manager to operate the villas as vacation rentals. The villas were marketed as eco-
materials.
luxury retreats, attracting high-end tourists and wellness travelers. The strong
demand for Ubud’s eco-friendly accommodations resulted in high occupancy rates,
• A Personal Retreat:
particularly during peak tourist seasons.
Marie and Thomas planned to spend part of the year in one of the villas while renting
out the second.

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• ROI and Property Value:

Marie and Thomas managed to repay their initial investment within the first 5 years,
achieving a 20% yearly ROI through rental income. The property’s value has also
appreciated by 20%, driven by Ubud’s growing popularity. They are now planning
to reinvest part of their profits into extending the lease for another 5 years and

07
expanding their project by leasing an adjacent plot of land. They trust Tipi Estate
to help them navigate this next phase of expansion and secure the necessary local
contacts.

Challenges Encountered: CHAPTER

• Permitting Delays:
As with many building projects in Bali, securing building permits took longer than
expected. The project manager played an essential role in liaising with local officials
to keep things on track.
• Managing a Project Remotely:
Although Marie and Thomas made several trips to Bali during the construction,
much of the process was managed from abroad. Their decision to hire a dedicated
project manager ensured that the build adhered to their expectations and stayed
within budget.

Lessons Learned & Key Takeaways:

• Importance of Local Expertise: GETTING STARTED

Having a reliable team of local professionals, including a notary, architect, and
project manager, was crucial in ensuring the success of their project. WITH YOUR INVESTMENT
• Eco-Conscious Design Pays Off: IN BALI
The decision to focus on sustainability and eco-luxury gave their villas a competitive
edge in Ubud’s rental market, where eco-tourism is on the rise.

• Long-Term Strategy:
While the project required significant upfront investment and involvement, the
returns have been steady, and the property’s appreciation provides added long-
term value. Marie and Thomas are now looking to expand, further capitalizing on
Ubud’s growth.

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1. Defining Your Investment Goals

The first step in any investment journey is to clearly define what you hope to achieve. Your
goals will shape every decision, from location selection to property type and management
strategy. Consider the following aspects:

1.1 Short-Term vs. Long-Term Investment

• Short-Term Rental Income:

If your primary goal is to generate immediate cash flow, you’ll want to focus on properties in
high-demand tourist areas like Ubud, Pererenan, or Uluwatu. These areas offer higher rental
yields due to consistent tourist traffic, particularly for well-located villas or apartments.
Properties in these areas can often achieve occupancy rates upwards of 80-85% annually,
allowing for quick returns. However, the competition in these markets is also higher, so
your property will need to stand out with premium amenities or unique features.

• Long-Term Capital Appreciation:

If you’re more interested in the potential for your property to increase in value over time,
consider investing in up-and-coming areas like Tabanan, Kedungu, or Nusa Penida. These
regions are experiencing infrastructure improvements and growing interest, which can lead
to significant appreciation over the next 5-10 years. While these areas might not yield as

DEFINING YOUR INVESTMENT high immediate rental returns as tourist hotspots, the potential for property value growth
can be substantial, particularly if you plan to hold onto the property for an extended period.
GOALS AND ASSESSING
YOUR BUDGET
1.2 Personal Use vs. Investment
Embarking on a real estate investment in Bali begins with a clear understanding of • Personal Enjoyment:
your objectives and a realistic assessment of your financial capacity. These two steps are If you plan to use the property as a personal vacation home, your priorities might differ from
foundational to guiding your decision-making process, from selecting the right property those purely focused on returns. Consider locations that offer the lifestyle amenities you
to planning for future returns. value—proximity to beaches, tranquility, cultural attractions, or wellness centers. While
these properties can still generate income when not in use, the emphasis might be more on
comfort and personal taste rather than maximum rental income.

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• Pure Investment: 2.1 Comprehensive Budget Planning

If your goal is solely financial, your focus will be on factors like rental yield, occupancy rates,
and market trends. You might choose a property in a busy area with high tourist turnover, • Property Purchase Costs:
even if it’s not the quietest or most scenic location. Depending on your investment goals, your budget should account for the cost of purchasing
either land or an existing property. For example, land in up-and-coming areas like Nusa
Penida can cost around 1,000,000,000 IDR (USD 70,000) for an 800 sqm plot for 30 years,

1.3 Property Type and Strategy while a completed villa in Ubud may range from 3-6 billion IDR (USD 200,000 - 400,000)
depending on the size and location.

• Off-Plan Villas:
Purchasing an off-plan villa (a property that is planned or under construction) can be a cost- • Construction Costs:
effective way to enter the market, often at a lower price point than completed properties. If you’re building, include costs for materials, labor, and permits. Construction costs in Bali

This option allows you to benefit from price appreciation as the property is built and the can vary, but as a general estimate, building a high-quality villa might cost around 8-12

area develops. However, it comes with risks like construction delays or changes in market million IDR per square meter (approximately USD 500-800 per square meter).Be aware

conditions. that every land is different; building on certain areas can be more expensive than others.
For example, construction in islands like Nusa Lembongan or in hardly accessible areas may

• Land Development: incur additional costs due to logistics and transportation challenges.

If you have a long-term vision and a higher tolerance for involvement and risk, purchasing
land to develop can offer substantial returns. This route allows for full customization of • Professional Fees:
the property, potentially increasing its appeal and value. However, it requires a strong Don’t forget to include fees for architects, contractors, project managers, notaries, and

understanding of local building regulations, and you’ll need to assemble a capable team of lawyers. Engaging a project manager, for example, might add 5-10% to your construction

architects and contractors (as discussed earlier). budget, but can save you from costly mistakes and delays. Notaries will cost you between
0,5% and 1% of the land or villa cost.

• Existing Villas:
Buying an existing villa with a proven rental history is a safer bet for those looking for • Legal and Permit Fees:
immediate returns. This option provides clear data on occupancy rates and rental income, These costs cover everything from obtaining the necessary building permits (PBG/SLF) to

reducing the uncertainty associated with new developments. legal due diligence, which ensures the property is free from encumbrances and complies
with local regulations.

• Contingency Budget:
It’s wise to set aside at least 10-15% of your total budget for unforeseen expenses.
2. Assessing Your Budget Construction projects often face unexpected challenges, whether it’s additional work
required due to land topography or rising material costs.
Once your goals are clear, the next step is to assess your financial capacity. Understanding
your budget will help narrow down the locations and property types that are viable options.

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2.2 Financing Options

ASSEMBLE YOUR
• Self-Funding:
Self-funding is the most common route for foreigners investing in Bali. It provides you with
INVESTMENT TEAM
full control over your investment without the need for external financing. If you plan to fund
the project yourself, it’s crucial to have a comprehensive understanding of all associated Once you’ve defined your investment goals and budget, the next critical step is assembling

costs and to maintain sufficient liquidity to cover any unexpected expenses that may arise a reliable and knowledgeable team of local professionals. The right team will guide you

during the process. through the complexities of Bali’s real estate market, ensuring your investment is secure
and successful.

• Bank Loans and Financing:

Financing options for foreigners in Bali are quite limited. Local banks rarely, if ever, provide
loans to foreign investors. Additionally, European and other international banks are generally 1. Real Estate Agents
hesitant to lend money for real estate investments in Bali. However, in some cases, it may
be possible to secure a loan if you have a strong, long-standing relationship with your bank Start by connecting with a trusted real estate agent like Tipi Estate. A well-established
and can offer a first-rank mortgage on a property that is already fully financed. This option, agent will have deep knowledge of the local market and can introduce you to properties or
though rare, might be worth exploring if you have existing assets that can be leveraged. land that align with your investment criteria.

• Private Equity or Investor Groups: They can also help you navigate the legal aspects of property transactions in Bali, including
If you’re looking to spread the financial burden and mitigate risks, consider joining or the nuances of leasehold versus freehold ownership.
forming an investment group. Pooling resources with other investors can be an effective
way to finance larger development projects. By partnering with others, you can access more
Role of the Agent:
significant opportunities and share the financial risk, which can be especially beneficial for
more ambitious developments that require substantial capital.
• Property Search:
Identify properties that match your investment goals, whether you’re looking for land to
• Off-Plan Financing:
build on, an off-plan project, or an existing villa.
For those purchasing off-plan properties, many developers offer structured payment plans.
Typically, you’ll pay a portion of the villa price, often 50% or less, at the time of signing the
• Market Insights:
contract. The remaining balance is usually spread out over the construction period, which
Provide data and trends on property values, rental yields, and emerging areas.
typically lasts around 12 months or less. It’s vital to be financially prepared for the subsequent
payment deadlines, as failing to meet them could result in losing both the invested funds
• Negotiation:
and the property itself. Proper financial planning is essential to ensure you can meet these
Assist in negotiating the best terms for your purchase.
obligations as they arise.

• Legal Guidance:
Work with notaries and lawyers to ensure the property transaction complies with local laws.

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2. Legal Experts: Notaries and Lawyers 4. Project Managers

Having a qualified notary and lawyer on your team is essential for legal due diligence. They If you’re not based in Bali full-time, hiring a project manager can be invaluable. This third-
will verify land titles, ensure the property is free from legal disputes, and confirm that the party professional will oversee the construction process, maintaining quality control, and
transaction adheres to Indonesian regulations for foreign ownership. managing timelines and costs on your behalf.
Most reputable real estate agencies, such as Tipi Estate, regularly collaborate with notaries
and can help connect you with the appropriate legal partner. Role of the Project Manager:

Role of Legal Experts: • Quality Control:

Ensure that construction meets your expectations for quality and adheres to the agreed-
• Title Verification: upon design.
Confirm that the property’s ownership is clear and legitimate. • Budget Monitoring:
• Contract Drafting: Track expenses to prevent cost overruns and keep the project within budget.
Prepare and review contracts to ensure your interests are protected. • Regular Updates:
• Regulatory Compliance: Provide you with regular progress reports, including photos and status updates.
Ensure that all legal requirements are met, including zoning laws, permits, and taxes.

5. Property Managers
3. Architects and Contractors
If you plan to build or renovate, engaging with architects and local contractors early
Once your property is complete, a reputable property management company can
in the process is crucial. These professionals will assess whether a plot of land is suitable for
help you maximize rental income. They’ll handle everything from marketing the property
your project, considering factors like zoning, topography, and utility access.
to managing guest services and maintenance, ensuring that your investment generates

Role of Architects and Contractors: consistent returns.

• Design and Planning: Role of Property Managers:

Work with you to create a design that aligns with your vision while adhering to local building
codes. • Rental Management:

• Site Assessment: Handle bookings, guest communications, and occupancy rates.

Evaluate the land’s suitability for construction, including potential challenges like steep • Maintenance:

terrain or access to infrastructure. Ensure the property is well-maintained and address any issues that arise.

• Construction Management: • Marketing:

Oversee the building process, ensuring that it stays on schedule and within budget. Promote the property across various platforms to attract high-paying guests.

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Quick Calculation of ROI: For a quick estimate, calculate ROI using the formula:

EVALUATING AND REFINING YOUR

ROI = (Annual Net Revenue / Total Investment Cost) x 100
OPTIONS
To break it down:
After defining your goals and assembling your team, the next step is to thoroughly evaluate
• Estimate the Annual Net Revenue:
potential properties, whether they are plots of land or existing villas. This phase involves a
Multiply the approximate nightly rental rate by the occupancy rate, then subtract estimated
careful assessment of various options, comparing them against your investment criteria,
expenses.
and refining your search as needed.
• Divide by the Total Investment Cost:
This includes the purchase price of the villa or land, construction costs, and any additional
3.1 Assessing Lands and Villas expenses.

• Land Evaluation:
This quick calculation gives you a snapshot of potential returns, helping you compare
If you’re considering land for development, assess its suitability by reviewing zoning
various properties. However, it’s always recommended to conduct a more detailed
regulations, access to utilities, topography, and proximity to essential amenities. Consider
analysis using a spreadsheet or consulting with a property manager to consider different
how these factors will impact construction costs and future resale value.
scenarios and ensure accuracy.

• Villa Evaluation:
• Other Criteria:
For existing villas, focus on the structural condition, rental history, and potential for
Consider factors such as location, market trends, and property features that align with
appreciation. Investigate the property’s compliance with local regulations, and make sure
your investment strategy. For personal use, prioritize lifestyle amenities that will enhance
it has all necessary permits.
your experience.

3.2 ROI and Other Criteria

• Return on Investment:
Calculate potential ROI by considering purchase costs, renovation or construction expenses,
and projected rental income. Compare this with market data to ensure your investment
meets your financial goals.

Note on the ROI:

Return on Investment (ROI) is a crucial metric when evaluating real estate investments.
It represents the ratio of net income generated by the property to the investment cost,
providing insight into the profitability of your investment. ROI helps you compare different
properties and investment opportunities, ensuring you make an informed decision.

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EFFICIENT MANAGEMENT AND

KNOWING WHEN TO SELL
Once you’ve secured your property, managing it effectively is key to maximizing your
investment. Whether you plan to rent it out or hold it for long-term appreciation, having a
solid management strategy is essential.

4.1 Property Management

• Self-Management vs. Hiring a Manager:

3.3 Iterative Feedback and Refinement

Decide whether you will manage the property yourself or hire a property management
company. If you’re not based in Bali, or if you prefer a hands-off approach, a reputable
• Feedback to Agents:
property manager is invaluable. They handle everything from tenant relations to
Maintain open communication with your real estate agent. Provide feedback on properties
maintenance and marketing, ensuring your property remains competitive in the rental
you’ve viewed and refine your search criteria based on what you’ve learned. This iterative
market.
process helps ensure that your final choice aligns with your goals.

• Trust Your Gut:

• Maintenance and Upkeep:
While data and professional advice are crucial, don’t ignore your instincts. If a property feels
right and ticks all the essential boxes, it might be the one to pursue.
Regular maintenance is crucial to preserving the property’s value and appeal. Schedule
routine inspections and address issues promptly to avoid costly repairs down the line.

3.4 Closing the Deal

• Final Checks:
• Marketing and Tenant Relations:
Before making a final decision, ensure all green flags are in place—clear title, sound
If renting, ensure your property is marketed effectively across multiple platforms. Building
structure, legal compliance, and financial feasibility.
good relationships with tenants can lead to higher occupancy rates and better care for your
property.
• Making the Purchase:
Once you’re confident in your choice, work with your agent, lawyer, and notary to close the
deal. Make sure all documents are in order and that the transaction complies with local laws.

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4.2 Optimizing for Taxes

• Understanding Local Taxes:

Stay informed about your tax obligations, including property taxes, rental income taxes,
and any additional fees associated with foreign ownership.

• Tax Efficiency:
Work with a tax advisor to structure your investment in a way that maximizes tax efficiency,
potentially through deductions, allowances, or corporate structures like a PT PMA. CONCLUSION
Throughout this e-book, we’ve explored the vibrant and ever-evolving
landscape of Bali’s real estate market. We’ve covered the crucial steps for a
4.3 Knowing When to Sell successful investment journey, from defining your investment goals and assessing
your budget to assembling a reliable team and managing your property efficiently.

• Market Timing:
By now, you should have a clearer understanding of the opportunities and
Keep a close eye on market trends and property values. Selling when the market is strong
challenges that come with investing in Bali, as well as the importance of thorough
can significantly boost your returns.
research and careful planning. Investing in Bali’s real estate offers immense
potential, whether you’re looking to generate short-term rental income, secure
long-term capital appreciation, or simply create a personal retreat in paradise.

• Signs It’s Time to Sell: The key is to approach your investment with clear goals, informed decisions, and a
Consider selling if the property has appreciated significantly, if market conditions are trusted network of local professionals.
favorable, or if your investment goals have changed.
We encourage you to take the next steps in your investment journey with
confidence. Whether you’re ready to explore available properties, need further
• Preparing for Sale: advice, or wish to connect with our team for personalized assistance, we’re here to
When the time comes to sell, ensure your property is in top condition and work with your support you every step of the way.
agent to market it effectively. Staging and minor renovations can help maximize the sale
price.

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ADDITIONAL RESOURCES
Glossary of Terms Related to Real Estate Investment in Bali:

• ROI (Return on Investment):

A financial metric used to evaluate the profitability of an investment, expressed as

a percentage of the original investment cost.

• Hak Milik:

The highest form of land ownership in Indonesia, equivalent to freehold ownership,

but generally not available to foreigners.

• Hak Pakai:

A right-to-use land title available to foreigners, allowing them to lease property for

up to 80 years.

• Hak Guna Bangunan (HGB):

A right-to-build title allowing foreigners, through a PT PMA, to own buildings and

use the land for up to 80 years.

• Leasehold (Hak Sewa):

A legal arrangement where a property is leased for a set period, usually 25-30 years,

with the possibility of renewal.

• PMA (Penanaman Modal Asing):

A foreign-owned company structure required for foreign investors seeking

to acquire HGB property in Indonesia.

• Notary (Notaris):

A legal professional who ensures the legality of property transactions in Indonesia,

including verifying titles and overseeing the signing of contracts.

Contact Information: : [email protected]
• PBG (Persetujuan Bangunan Gedung): : +62 878 6349 6152
For further inquiries, advice,
The building approval permit required for any construction in Indonesia. : www.tipiestate.com
or personalized assistance,
• SLF (Sertifikat Laik Fungsi): please reach out to us: : @tipiestate
A certificate confirming that a building complies with all regulations and is fit for use.

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